Written by Rami Baron

Over 30 years ago, we began to see the upstairs retailer or the retail showroom. The start was in the capital cities, where the manufacturing jeweller would occasionally sell to family and friends. Although few did it, as long as it was never spoken about and not actively pursued, it wasn’t visible. But God forbid someone found out; it was like you were stealing my customer, and there was the occasional uproar. How dare they sell to the public? Everyone has their place in the network, and no one should ever contravene this. I remember vividly when one of the biggest diamond wholesalers started to sell to the public, and there was such fury. The trade was so naive that the wholesaler lost some huge accounts and needed to survive. Added to this, retailers would take goods on consignment and take months to pay, using the wholesaler as a bank (this still happens today).

Thus, this diamond wholesaler became one of the biggest diamond and jewellery retailers in Sydney, especially for big stones, with the most reputable stores losing sales and their best customers to a woman whose nickname was the “Queen of Diamonds.” You will still see her holding court in Double Bay, and what many will never know is that Susie Israel is one of the most generous women you will ever meet and has given to so many over the years. Susie was and is the ultimate networker who never needed social media.

Fast forward to the last decade, and you can see so many amazing jewellery retailers who are upstairs. In every capital city, you have a concentration of buildings where there are easily between 5-20 jewellery retailers in showrooms upstairs. These retailers tended to be those who grasped the power of the internet early. Instead of spending money on rent, they used it to build great websites and focus on website optimization to drive traffic to their virtual store. The last five years have revealed another major change: this upstairs model catered perfectly to those focusing on lab-grown diamonds—a simple setup with none of the restrictions and fit-out costs charged from shopping centres, which themselves struggle to drive traffic through their doors.

So why do I write about this now? Most of you reading this article know why you are where you are; some will realize they are in a shop by default. You inherited a retail store or came into it recently believing that this is the best way to be seen by more people. I don’t for one moment think there is one shoe that fits all. Some retailers have built amazing businesses even while paying insane rents—a testament to their business acumen.

It’s clear that if you have a well-thought-out business plan, a vision, and have crunched the financials, then it wouldn’t matter where you set up; you will be successful. So, why have some luxury watch brands begun to set up retail showrooms upstairs? Audemars Piguet, one of the top Swiss watch brands in the world, is leading the charge. In 2018, they set up their first lounge-style showroom in Hong Kong, and to date, they have built almost 20 additional ones. Since then, other brands such as Vacheron Constantin and Lange & Söhne have followed suit. Some have created private club atmospheres.

The logic is based on the need to create a special space, especially when selling ultra-expensive pieces. I personally feel there is a great opportunity to create a unique environment in a larger space that an upstairs showroom can provide. I don’t think it’s limited to super-expensive sales but rather about creating a relaxed space where you can regale your customers with all the add-ons that would feel out of place in a retail store unless it’s the size of Tiffany or Cartier. Everyone wants to feel special. It could be a whisky bar; it could be cold towels on a hot summer day; a small yummy snack; a cold beer; or maybe a separate room where clients can have their nails touched up before they start trying on rings—who doesn’t love to be pampered? In San Francisco, one of these showrooms spoke about how they went upstairs as much for the space as for having a discreet location with privacy that their customers felt comfortable visiting.

There is no doubt that the concept of destination shopping applies—that customers will travel to a nontraditional location other than a shopfront to visit a jeweller and purchase that special piece. The question you need to ask yourself is “how you can create an environment that aligns with your image and marketing collateral—not only matching but exceeding customer expectations”?.

Think of your showroom as a blank canvas; make stacks of notes on what you think you want; get some professional advice to fill in the gaps… here I go again… travel and try to see what others have done—you don’t have to reinvent the wheel. Try to be creative but practical; we all have budgets, so don’t get hung up on some crazy detail for which five minutes after opening you’ll ask yourself why you spent all that money on X. You can always add it later if you really love the idea. Just like a home, you need time to see what works for you, so it’s okay if it’s not 100% perfect from the beginning. Something to think about:

Trade well.

PS Feel free to let me know if there are any specific topics you may want my thoughts on and let me know.!